UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 2, 2015
General Motors Financial Company, Inc.
(Exact name of registrant as specified in its charter)
Texas | 1-10667 | 75-2291093 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
801 Cherry Street, Suite 3500, Fort Worth, Texas 76102
(Address of principal executive offices, including Zip Code)
(817) 302-7000
(Registrants telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
This Amendment No. 1 to Form 8-K (Amendment No. 1) is being filed to amend the current report on Form 8-K (the Initial 8-K) filed with the Securities and Exchange Commission on January 5, 2015, by General Motors Financial Company, Inc. (GM Financial or the Company), which was filed to report that on January 2, 2015 the Company had completed a transaction under which it acquired Ally Financial Inc.s (Ally Financial) 40% equity interest in SAIC-GMAC Automotive Finance Company Limited (formerly known as GMAC-SAIC Automotive Finance Company Limited) (SAIC-GMAC), a joint venture that conducts auto finance operations in China. Also effective on January 2, 2015, and as reported in the Initial 8-K, the Company sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Ltd. (SAIC FC), a current shareholder of SAIC-GMAC. This Amendment No. 1 is being filed to provide the required historical financial statements and unaudited pro forma financial information not required to be included in the Initial 8-K.
Forward-Looking Statements
Except for the historical information contained herein, the matters disclosed herein include forward-looking statements which are the Companys current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or those anticipated by the Company. The most significant of these risks are detailed from time to time in the Companys filings and reports with the Securities and Exchange Commission including the Companys annual report on Form 10-K for the year ended December 31, 2014. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, the Companys actual results may vary materially from those expected, estimated or projected. Actual events or results may differ materially. It is advisable not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to, and does not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.
ITEM | 9.01 FINANCIAL STATEMENTS AND EXHIBITS |
(a) Financial Statements of Business Acquired
The following financial statements for the international auto finance and financial services businesses of Ally Financial (Ally-IO) are filed as Exhibit 99.1 hereto and incorporated by reference herein: combined balance sheets of Ally-IO as of December 31, 2014 and December 31, 2013, and the related combined statements of comprehensive income, changes in invested equity, and cash flows for each of the three years ended December 31, 2014, and the report of the independent registered public accounting firm related thereto.
(b) Pro Forma Financial Information
The pro forma financial information reflecting the acquisition of a 35% equity interest in SAIC-GMAC (resulting from the acquisition of Ally Financials 40% equity interest in SAIC-GMAC and the sale of a 5% equity interest by GM Financial to SAIC FC) is hereby incorporated by reference to Exhibit 99.2 hereto.
(c) Not Applicable
(d) Exhibits
Exhibit |
Description of Exhibit | |
99.1 | Audited combined balance sheets of Ally-IO as of December 31, 2014 and December 31, 2013, and the related combined statements of comprehensive income, changes in invested equity, and cash flows for each of the three years ended December 31, 2014, and the report of the independent registered public accounting firm related thereto | |
99.2 | The pro forma financial information, as of and for the year ended December 31, 2014, reflecting the acquisition of a 35% equity interest in SAIC-GMAC (resulting from the acquisition of Ally Financials 40% equity interest in SAIC-GMAC and the sale of a 5% equity interest by GM Financial to SAIC FC) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
General Motors Financial Company, Inc. | ||||||
(Registrant) | ||||||
Date: March 17, 2015 | By: | /s/ CHRIS A. CHOATE | ||||
Chris A. Choate | ||||||
Executive Vice President and Chief Financial Officer |
INDEX TO EXHIBITS
Exhibit No. |
Exhibit | |
99.1 | Audited combined balance sheets of Ally-IO as of December 31, 2014 and 2013, the related combined statements of comprehensive income, changes in invested equity, and cash flows for each of the three years ended December 31, 2014, and the report of the independent public accounting firm related thereto. | |
99.2 | The pro forma financial information, as of and for the year ended December 31, 2014, reflecting the acquisition of a 35% equity interest in SAIC-GMAC (resulting from the acquisition of Ally Financials 40% equity interest in SAIC-GMAC and the sale of a 5% equity interest by GM Financial to SAIC FC). |
Exhibit 99.1
INDEPENDENT AUDITORS REPORT
To the Board of Directors and Shareholders of Ally Financial Inc.:
We have audited the accompanying combined financial statements of Ally Financial Inc.s International Operations, all of which are under common control and common management, which comprise the combined balance sheet as of December 31, 2014 and 2013, and the related combined statements of comprehensive income, changes in invested equity, and cash flows for each of the three years in the period ended December 31, 2014, and the related notes to the combined financial statements.
Managements Responsibility for the Combined Financial Statements
Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the companys preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Ally Financial Inc.s International Operations as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in accordance with accounting principles generally accepted in the United States of America.
Emphasis-of-Matter
We draw attention to Note 1 of the combined financial statements, which describes the basis of presentation. The combined financial statements reflect the assets, liabilities, revenues and expenses directly attributable to Ally Financial Inc.s International Operations, as well as allocations deemed reasonable by management. We also draw attention to Note 6 of the combined financial statements, which describes transactions with affiliates of Ally Financial Inc. Our opinion is not modified with respect to these matters.
/S/ DELOITTE & TOUCHE LLP |
Deloitte & Touche LLP |
Detroit, Michigan March 11, 2015 |
Ally Financial Inc. - International Operations
Combined Financial Statements
December 31, 2014
Combined Statements of Comprehensive Income
Ally Financial Inc. - International Operations
Year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Financing revenue and other interest income |
||||||||||||
Interest and fees on finance receivables and loans |
$ | | $ | 715 | $ | 1,514 | ||||||
Other financing revenue and interest income |
| 29 | 85 | |||||||||
|
|
|
|
|
|
|||||||
Total financing revenue and other interest income |
| 744 | 1,599 | |||||||||
Interest expense |
||||||||||||
Interest on short-term borrowings |
| 52 | 130 | |||||||||
Interest on long-term debt |
| 360 | 627 | |||||||||
|
|
|
|
|
|
|||||||
Total interest expense |
| 412 | 757 | |||||||||
Depreciation expense on operating lease assets |
| 7 | 38 | |||||||||
|
|
|
|
|
|
|||||||
Net financing revenue |
| 325 | 804 | |||||||||
Other revenue |
||||||||||||
Income from equity method investee |
122 | 118 | 96 | |||||||||
Other income, net of losses |
| 73 | 154 | |||||||||
|
|
|
|
|
|
|||||||
Total other revenue |
122 | 191 | 250 | |||||||||
Total net revenue |
122 | 516 | 1,054 | |||||||||
Provision for loan losses |
| 71 | 86 | |||||||||
Noninterest expense |
||||||||||||
Compensation and benefits expense |
| 58 | 153 | |||||||||
Other operating expenses |
4 | 138 | 403 | |||||||||
|
|
|
|
|
|
|||||||
Total noninterest expense |
4 | 196 | 556 | |||||||||
Income before income tax expense |
118 | 249 | 412 | |||||||||
Income tax expense |
| 43 | 45 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 118 | $ | 206 | $ | 367 | ||||||
|
|
|
|
|
|
|||||||
Other comprehensive (loss) income, net of tax |
||||||||||||
Translation adjustments |
||||||||||||
Translation adjustments arising from revaluations during the period |
(5 | ) | (84 | ) | 71 | |||||||
Less: Accumulated translation adjustments reclassified to net income during the period |
| | 2 | |||||||||
|
|
|
|
|
|
|||||||
Net change |
(5 | ) | (84 | ) | 69 | |||||||
Defined benefit pension plans |
||||||||||||
Net losses and prior service costs, net of tax benefit of $9 million in 2012 |
| | (22 | ) | ||||||||
|
|
|
|
|
|
|||||||
Other comprehensive loss, net of tax |
(5 | ) | (84 | ) | 47 | |||||||
|
|
|
|
|
|
|||||||
Comprehensive income |
$ | 113 | $ | 122 | $ | 414 | ||||||
|
|
|
|
|
|
The Notes to the Combined Financial Statements are an integral part of these statements.
Combined Balance Sheets
Ally Financial Inc. - International Operations
December 31, ($ in millions) |
2014 | 2013 | ||||||
Assets |
||||||||
Investment in equity method investee |
$ | 634 | $ | 517 | ||||
|
|
|
|
|||||
Total assets |
$ | 634 | $ | 517 | ||||
Invested equity |
||||||||
Parents net investment |
592 | 470 | ||||||
Accumulated other comprehensive income |
42 | 47 | ||||||
|
|
|
|
|||||
Total invested equity |
$ | 634 | $ | 517 | ||||
|
|
|
|
The Notes to the Combined Financial Statements are an integral part of these statements.
Combined Statements of Changes in Invested Equity
Ally Financial Inc. - International Operations
($ in millions) |
Parents net investment |
Accumulated other comprehensive (loss) income |
Total invested equity |
|||||||||
Balance at January 1, 2012 |
$ | 3,441 | $ | (41 | ) | $ | 3,400 | |||||
|
|
|
|
|
|
|||||||
Net income |
367 | | 367 | |||||||||
Capital contributions |
23 | | 23 | |||||||||
Dividends to Ally Financial Inc. |
(281 | ) | | (281 | ) | |||||||
Other comprehensive income |
| 47 | 47 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2012 |
$ | 3,550 | $ | 6 | $ | 3,556 | ||||||
|
|
|
|
|
|
|||||||
Net income |
206 | | 206 | |||||||||
Capital contributions |
4 | | 4 | |||||||||
Dividends to Ally Financial Inc. |
(27 | ) | | (27 | ) | |||||||
Disposal of business |
(3,263 | ) | 125 | (3,138 | ) | |||||||
Other comprehensive loss |
| (84 | ) | (84 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2013 |
$ | 470 | $ | 47 | $ | 517 | ||||||
|
|
|
|
|
|
|||||||
Net income |
118 | | 118 | |||||||||
Capital contributions |
4 | | 4 | |||||||||
Other comprehensive loss |
| (5 | ) | (5 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2014 |
$ | 592 | $ | 42 | $ | 634 | ||||||
|
|
|
|
|
|
The Notes to the Combined Financial Statements are an integral part of these statements.
Combined Statements of Cash Flows
Ally Financial Inc. - International Operations
Year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Operating activities |
||||||||||||
Net income |
$ | 118 | $ | 206 | $ | 367 | ||||||
Reconciliation of net income to net cash provided by operating activities |
||||||||||||
Depreciation and amortization |
| 48 | 117 | |||||||||
Provision for loan losses |
| 71 | 86 | |||||||||
Income from equity method investee |
(122 | ) | (118 | ) | (96 | ) | ||||||
Non cash corporate overhead allocation |
4 | 4 | 4 | |||||||||
Net change in |
||||||||||||
Deferred income taxes |
| 24 | (111 | ) | ||||||||
Interest payable |
| 6 | 56 | |||||||||
Other assets |
| (90 | ) | (78 | ) | |||||||
Other liabilities |
| (117 | ) | 373 | ||||||||
Other, net |
| 57 | 27 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
| 91 | 745 | |||||||||
|
|
|
|
|
|
|||||||
Investing activities |
||||||||||||
Net increase in finance receivables and loans |
| (1,051 | ) | (1,091 | ) | |||||||
Purchases of operating lease assets |
| (11 | ) | (84 | ) | |||||||
Disposals of operating lease assets |
| 83 | 92 | |||||||||
Net change in restricted cash related to variable interest entity |
| (65 | ) | (44 | ) | |||||||
Sale of business units |
| (607 | ) | | ||||||||
Other, net |
| (40 | ) | 4 | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
| (1,691 | ) | (1,123 | ) | |||||||
|
|
|
|
|
|
|||||||
Financing activities |
||||||||||||
Net change in short-term borrowingsthird party |
| 545 | (169 | ) | ||||||||
Proceeds from issuance of long-term debtthird party |
| 3,386 | 6,001 | |||||||||
Repayments of long-term debt |
| (2,840 | ) | (4,465 | ) | |||||||
Net change in related party debt with Ally Financial Inc. |
| (381 | ) | (283 | ) | |||||||
Dividends paid to AFI |
| | (255 | ) | ||||||||
Other, net |
| (6 | ) | 5 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
| 704 | 834 | |||||||||
|
|
|
|
|
|
|||||||
Effect of exchange-rate changes on cash and cash equivalents |
| 8 | (15 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net (decrease) increase in cash and cash equivalents |
| (888 | ) | 441 | ||||||||
Cash and cash equivalents at beginning of period |
| 888 | 447 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
$ | | $ | | $ | 888 | ||||||
|
|
|
|
|
|
|||||||
Supplemental disclosures |
||||||||||||
Cash paid for |
||||||||||||
Interest |
$ | | $ | 396 | $ | 695 | ||||||
Income taxes |
| 40 | 26 |
The Notes to the Combined Financial Statements are an integral part of these statements.
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
1. Description of Business, Basis of Presentation, and Significant Accounting Policies
Ally Financial Inc. and its affiliated companies (formerly GMAC Inc. and referred to herein as Ally or AFI) is a leading independent, diversified financial services firm. Founded in 1919, Ally is a leading financial services company with approximately 95 years of experience providing a broad array of financial products and services, primarily to automotive dealers and their customers.
On November 21, 2012, Ally announced that it had reached agreements to sell substantially all of its remaining international automotive finance operations to General Motors Financial Corporation (GMF). The agreements include sales of Allys international automotive finance operations in 14 countries across Asia, Europe and South America (AFI-IO) whose focus has been on five core markets: China (through our joint venture, SAIC-GMAC Automotive Finance Company Limited (SAIC-GMAC)), Brazil, Mexico, Germany and the United Kingdom.
On April 1, 2013, AFI completed the disposal of substantially all of the European and Latin American automotive finance operations except for France, Portugal and Brazil; on June 1, 2013 AFI completed the disposal of our operations in France and Portugal; on October 1, 2013 AFI completed the disposal of our operations in Brazil; and on January 2, 2015 AFI completed the disposal of our operations in China. The aggregate consideration for these disposals was $4.3 billion, which was paid to our parent.
The accompanying special purpose financial statements represent the combined financial position and results of operations for the entities governed under the agreements of sale (herein referred to as the Carve-out Financial Statements). Within these financial statements we, us, the Company, and our refers to AFI-IO. AFI-IO provides financial services to automotive dealer customers, predominately focusing on financing automobiles manufactured by General Motors Company (GM).
Combination and Basis of Presentation
The Carve-out Financial Statements include the combined financial position and results of operations for AFI-IO entities during the periods owned by AFI. The financial information for 2014 recorded within the Combined Statement of Comprehensive Income represents twelve months of activity for China. The financial information for 2013 recorded within the Combined Statement of Comprehensive Income represents three months of our operations in Europe and Latin America, except for Brazil, China, France and Portugal; five months of France and Portugal, nine months of activity for Brazil and twelve months of activity for China consistent with the timing of disposal of businesses to GMF. The Combined Balance Sheet at December 31, 2014 and 2013, includes only the investment in China.
The Carve-out Financial Statements include our accounts after eliminating all significant intercompany balances and transactions and include all variable interest entities (VIEs) in which we were the primary beneficiary. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP).
The financial statements of entities that operate outside of the United States generally are measured using the local currency as the functional currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at year-end exchange rates and the results of operations and cash flows are determined using approximate weighted average exchange rates for the period. Translation adjustments are related to foreign subsidiaries using local currency as their functional currency and are reported as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains or losses are recorded directly to the Combined Statement of Comprehensive Income, regardless of whether such amounts are either realized or unrealized. We may elect to enter into foreign-currency derivatives to mitigate our exposure to changes in foreign-exchange rates.
The Carve-out Financial Statements reflect the assets, liabilities, revenues and expenses directly attributable to AFI-IO, as well as allocations deemed reasonable by management, to present the financial position, results of operations, changes in invested equity and cash flows on a stand-alone basis. The principal allocation methodologies have been described below. The financial information included herein may not necessarily reflect the financial position, results of operations, changes in invested equity and cash flows of AFI-IO in the future or what they would have been had AFI-IO been a separate, stand-alone entity during the periods presented.
AFI provided certain corporate services to us, and costs associated with these functions have been allocated to us. These allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, investor relations, human resources, risk management, tax, treasury, and other services. The allocations represent costs for services directly benefiting AFI-IO. A service is a benefit if it improves or has the potential to improve the operations or profitability of the benefited entity. An activity is generally considered to provide a benefit if the party in receipt of the services would have performed the same or similar activity for itself or would be willing to pay a third party to perform the same or similar activity. The total amount of these allocations from AFI were approximately $4 million, $13 million and $62 million for the years ended December 31, 2014, 2013 and 2012, respectively. These cost allocations are reflected within other operating expenses in our Combined Statement of Comprehensive Income and classified as Allocated corporate overhead expense in Note 6. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented.
7
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
The allocations may not reflect the expense we would have incurred as a stand-alone company for the periods presented. Actual costs that we may have incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees, and strategic decisions made in certain areas.
The Parents net investment represents AFIs interest in our recorded net assets. The Parents net investment balance represents the cumulative net investment made by AFI in us through that date, including any prior net income or loss or other comprehensive income (loss) attributed to us and contributions received from or distributions made to AFI. Certain transactions between us and other related parties that are wholly-owned subsidiaries of AFI, including allocated expenses and settlement of intercompany transactions, are also included in the Parents net investment.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and that affect income and expenses during the reporting period and related disclosures. In developing the estimates and assumptions, management uses all available evidence; however, actual results could differ because of uncertainties associated with estimating the amounts, timing, and likelihood of possible outcomes.
Significant Accounting Policies
Investment in Equity Method Investee
Investments in our investees are accounted for using the equity method of accounting. Under the equity method, the Company recognizes its share of the earnings or losses of an investee, both as adjustments to its original investment in its Combined Balance Sheet, and also in the Combined Statement of Comprehensive Income.
The share of an investees earnings that the Company recognizes is calculated based on its ownership percentage of the investees common stock. When calculating its share of an investees earnings, any intra-company profits and losses are eliminated. Further, if an investee issues dividends to the Company, the Company deducts the amount of these dividends from the carrying amount of its investment in investee.
If an investee records adjustments in other comprehensive income (loss), then the Company records its share of these adjustments as changes to its investment in the investee, with a corresponding adjustment. Our investees adjustments to other comprehensive income include foreign currency translation adjustments.
AFI has reviewed our position within the equity method investment in China for impairment each year presented within these statements; based on increasing net income, economic factors, and the sale price of $1.0 billion on January 2, 2015 to GMF, no impairment charges were required.
2. Other Income, Net of Losses
Details of other income, net of losses, were as follows.
Year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Insurance commissions income (a) |
$ | | $ | 24 | $ | 63 | ||||||
Late charges and other administrative fees |
| 22 | 39 | |||||||||
Other income, net of losses |
| 27 | 52 | |||||||||
|
|
|
|
|
|
|||||||
Total other income, net of losses |
$ | | $ | 73 | $ | 154 | ||||||
|
|
|
|
|
|
(a) | Primarily represents commissions earned from third party insurance companies related to insurance policies purchased by retail finance customers. |
8
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
3. Other Operating Expenses
Details of other operating expenses were as follows.
Year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Allocated corporate overhead expense (a) |
$ | 4 | $ | 13 | $ | 62 | ||||||
Technology and communications |
| 24 | 58 | |||||||||
Local non-income taxes |
| 38 | 65 | |||||||||
Vehicle remarketing and repossession |
| 10 | 23 | |||||||||
Provision for legal expenses |
| 12 | 10 | |||||||||
Restructuring expense |
| 5 | 10 | |||||||||
Professional services |
| 19 | 36 | |||||||||
Other operating expenses |
| 52 | 139 | |||||||||
Settlement of non-income tax contingency |
| (35 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Total other operating expenses |
$ | 4 | $ | 138 | $ | 403 | ||||||
|
|
|
|
|
|
(a) | Refer to Note 6. |
4. Investment in Equity Method Investee
The following tables present the condensed balance sheets and income statements for SAIC-GMAC on a GAAP basis of accounting. This summarized financial data represents that of the entire entity; not our 40% proportionate share of the assets, liabilities, or earnings of SAIC-GMAC.
Condensed Balance Sheets as of December 31, ($ in millions) |
2014 | 2013 | ||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 107 | $ | 648 | ||||
Finance receivable and loans, net |
||||||||
Consumer |
6,488 | 5,680 | ||||||
Commercial |
3,219 | 1,990 | ||||||
Allowance for loan losses |
(61 | ) | (50 | ) | ||||
|
|
|
|
|||||
Total finance receivables and loans, net |
9,646 | 7,620 | ||||||
Other assets |
100 | 90 | ||||||
|
|
|
|
|||||
Total assets |
$ | 9,853 | $ | 8,358 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Debt |
$ | 7,602 | $ | 6,516 | ||||
Accrued expenses and other liabilities |
666 | 550 | ||||||
|
|
|
|
|||||
Total liabilities |
8,268 | 7,066 | ||||||
Equity |
1,585 | 1,292 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 9,853 | $ | 8,358 | ||||
|
|
|
|
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
Condensed Statements of Income for year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Revenue |
||||||||||||
Interest and fees on finance receivables and loans |
||||||||||||
Consumer |
$ | 766 | $ | 674 | $ | 548 | ||||||
Commercial |
214 | 162 | 155 | |||||||||
|
|
|
|
|
|
|||||||
Total interest and fees on finance receivables and loans |
980 | 836 | 703 | |||||||||
Interest expense |
410 | 322 | 302 | |||||||||
Other revenue |
25 | 29 | 50 | |||||||||
|
|
|
|
|
|
|||||||
Total net revenue |
595 | 543 | 451 | |||||||||
Provision for loan losses |
41 | 27 | 21 | |||||||||
Noninterest expense |
||||||||||||
Compensation and benefits expense |
31 | 29 | 25 | |||||||||
Other operating expenses |
117 | 91 | 85 | |||||||||
|
|
|
|
|
|
|||||||
Total noninterest expense |
148 | 120 | 110 | |||||||||
Income before income tax expense |
406 | 396 | 320 | |||||||||
Income tax expense |
100 | 102 | 81 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 306 | $ | 294 | $ | 239 | ||||||
|
|
|
|
|
|
5. Derivative Instruments and Hedging Activities
We entered into derivative instruments, including interest rate and foreign-currency swaps and options in connection with our market risk management activities. Derivative instruments were used to manage interest rate risk relating to specific groups of assets and liabilities, including debt. In addition, we used foreign exchange contracts to mitigate foreign-currency risk associated with foreign-currency-denominated debt. Our primary objective for utilizing derivative financial instruments was to manage market risk volatility associated with interest rate and foreign-currency risks related to the assets and liabilities.
Interest Rate Risk
We executed interest rate swaps to modify our exposure to interest rate risk by converting certain fixed-rate instruments to a variable-rate and certain variable-rate instruments to a fixed rate. We monitored our mix of fixed- and variable-rate debt in relation to the rate profile of our assets. When it was cost-effective to do so, we entered into interest rate swaps to achieve our desired mix of fixed- and variable-rate debt.
We entered into economic hedges to mitigate exposure for the following categories.
| Debt We did not apply hedge accounting to our derivative portfolio held to mitigate interest rate risk associated with our debt portfolio. Typically, the significant terms of the interest rate swaps match the significant terms of the underlying debt resulting in an effective conversion of the rate of the related debt. |
| Other We entered into interest rates swaps to economically hedge our net fixed versus variable interest rate exposure. |
Foreign Currency Risk
We entered into derivative financial instruments to mitigate the risk associated with variability in cash flows related to foreign-currency financial instruments. Currency swaps were used to economically hedge foreign exchange exposure on foreign-currency-denominated debt by converting the funding currency to the same currency of the assets being financed. Similar to our interest rate derivatives, the swaps were generally entered into or traded concurrent with the debt issuance with the terms of the swap matching the terms of the underlying debt.
We have not elected to treat any foreign-currency derivatives as hedges for accounting purposes principally because the changes in the fair values of the foreign-currency swaps are substantially offset by the foreign-currency revaluation gains and losses of the underlying assets and liabilities.
10
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
Combined Statements of Comprehensive Income Presentation
The following table summarizes the location and amounts of gains and losses on derivative instruments reported in our Combined Statements of Comprehensive Income.
Year ended December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Economic derivatives |
||||||||||||
Gain (loss) recognized in earnings on derivatives |
||||||||||||
Interest rate contracts |
||||||||||||
Other income, net of losses |
$ | | $ | (7 | ) | $ | 11 | |||||
|
|
|
|
|
|
|||||||
Total interest rate contracts |
| (7 | ) | 11 | ||||||||
|
|
|
|
|
|
|||||||
Foreign exchange contracts (a) |
||||||||||||
Interest on long-term debt |
| 36 | (19 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total foreign exchange contracts |
| 36 | (19 | ) | ||||||||
|
|
|
|
|
|
|||||||
Gain (loss) recognized in earnings on derivatives |
$ | | $ | 29 | $ | (8 | ) | |||||
|
|
|
|
|
|
(a) | Amounts exclude gains and losses related to the revaluation of the related foreign-denominated debt or receivable. Losses of $34 million and gains of $16 million were recognized for the years ended December 31, 2013 and 2012, respectively. |
6. Related Party
Pursuant to AFIs Bylaws dated December 30, 2009 (the Bylaws), we must, subject to certain limited exceptions, conduct all transactions with our affiliates, current or former officers or directors, or any of their respective family members on terms that are fair and reasonable and no less favorable to AFI-IO than we would obtain in a comparable arms-length transaction with an independent third party.
Related party transactions are primarily settled in cash. Certain related party transactions are settled by non-cash capital contributions or dividends.
A summary of the income statement effect of transactions with AFI follows:
December 31, ($ in millions) |
2014 | 2013 | 2012 | |||||||||
Net financing revenue |
||||||||||||
Interest expense on loans with Ally Financial Inc. |
$ | | $ | 20 | $ | 100 | ||||||
Guarantee fees expense |
| 5 | 21 | |||||||||
Other revenue |
||||||||||||
Insurance commissions earned from AFI and other |
| | 4 | |||||||||
Other expense |
||||||||||||
Allocated corporate overhead expense (Refer to Note 1) |
4 | 13 | 62 | |||||||||
Other |
| 2 | 2 |
Notes to Combined Financial Statements
Ally Financial Inc. - International Operations
7. Geographic Information
Information concerning principal geographic area was as follows:
Year ended December 31, (in millions) |
Revenue (a) | Income before income tax expense |
Net income |
Total assets |
Long-lived assets |
|||||||||||||||
2014 |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asia |
$ | 122 | $ | 118 | $ | 118 | $ | 634 | $ | | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013 |
||||||||||||||||||||
Europe |
$ | 95 | $ | 20 | $ | 17 | $ | | $ | | ||||||||||
Latin America |
303 | 115 | 75 | | | |||||||||||||||
Asia |
118 | 114 | 114 | 517 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 516 | $ | 249 | $ | 206 | $ | 517 | $ | | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2012 |
||||||||||||||||||||
Europe |
$ | 386 | $ | 151 | $ | 134 | $ | 10,008 | $ | 152 | ||||||||||
Latin America |
572 | 169 | 141 | 7,696 | 11 | |||||||||||||||
Asia |
96 | 92 | 92 | 386 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,054 | $ | 412 | $ | 367 | $ | 18,090 | $ | 163 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Revenue consists of net financing revenue and total other revenue as presented in our Combined Statements of Comprehensive Income. |
8. Subsequent Events
We have evaluated subsequent events through March 11, 2015, the date our financial statements were issued.
On January 2, 2015, AFI completed a transaction under which GMF acquired the equity interests of SAIC-GMAC for $1.0 billion in total consideration.
12
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On November 21, 2012, General Motors Financial Company, Inc. (GM Financial) and Ally Financial Inc. (Ally) announced agreements to acquire Allys auto finance and financial services operations in Europe and Latin America and its non-controlling 40% equity interest in SAIC-GMAC Automotive Finance Company Limited (formerly known as GMAC-SAIC Automotive Finance Company Limited, SAIC-GMAC), which conducts auto finance and financial services business in China (collectively, the International Operations).
On April 1, 2013, GM Financial and Ally completed a transaction under which GM Financial acquired Allys equity interests in its top-level holding companies that comprise substantially all of Allys auto finance and financial services business in Europe other than in France and Portugal and in Latin America other than Brazil, pursuant to the Purchase and Sale Agreement entered into on November 21, 2012, as subsequently amended and restated on February 22, 2013 (the PSA). The purchase price was approximately $2.4 billion.
On May 14, 2013, GM Financial issued and sold $1.0 billion in aggregate principal amount of 2.75% Senior Notes due 2016 (the 2016 Notes), $750 million in aggregate principal amount of 3.25% Senior Notes due 2018 (the 2018 Notes) and $750 million in aggregate principal amount of 4.25% Senior Notes due 2023 (the 2023 Notes and, together with the 2016 Notes and the 2018 Notes, the Notes).
On June 3, 2013, GM Financial and Ally completed a transaction under which GM Financial acquired, effective as of June 1, 2013, Allys equity interests in its companies that comprise Allys auto finance and financial services business in France and Portugal. The purchase price was approximately $150 million.
On October 1, 2013, GM Financial and Ally completed a transaction under which GM Financial acquired Allys equity interests in its companies that comprise Allys auto finance and financial services business in Brazil, pursuant to the PSA. The purchase price was approximately $700 million.
On December 31, 2014, General Motors (GM) contributed capital of $700 million to GM Financial to be used to fund the acquisition of the International Operations in China.
On January 2, 2015, GM Financial and Ally completed a transaction under which GM Financial acquired Allys non-controlling 40% equity interest in SAIC-GMAC pursuant to the Share Transfer Agreement entered into on November 21, 2012, as subsequently amended and restated on August 26, 2014. Also effective on January 2, 2015, GM Financial sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Ltd. (SAIC FC), a current shareholder of SAIC-GMAC. The purchase price of the 40% equity interest was approximately $1.0 billion. The sale price of the 5% equity interest was approximately $127 million. The non-controlling 35% equity interest in SAIC-GMAC acquired is referred to in this Unaudited Pro Forma Condensed Combined Financial Information section as the China International Operations.
GM Financial is the wholly-owned captive finance subsidiary of GM. Ally has historically provided a majority of the financing for GMs dealers and a significant portion of the financing for its customers in the U.S. and Canada and other major international markets where it operates including through the operations that are the subject of the transactions described herein. Historically, Ally has been GMs primary financing partner for incentivized retail financing programs in its major markets. The purchase price was determined based on arms length negotiations.
The pro forma financial information set forth herein gives effect to the consummation of the acquisition of the China International Operations.
The unaudited pro forma condensed combined financial information included herein is derived from the historical financial statements of GM Financial and the International Operations and include adjustments which give effect to events that are (i) directly attributable to the the acquisition of the China International Operations, (ii) expected to have continued impact on GM Financials results of operations, (iii) factually supportable, and (iv) not reflected in the historical financial statements as of and for the period ended December 31, 2014. Refer to the section entitled Notes to Unaudited Pro Forma Condensed Combined Financial Information.
The unaudited pro forma condensed combined balance sheet includes certain pro forma adjustments to reflect the estimated impact of the consummation of the acquisition of the China International Operations, assuming this acquisition occurred on December 31, 2014. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2014 includes certain pro forma adjustments to reflect the impact of the consummation of the acquisition of the China International Operations, assuming this acquisition occurred on January 1, 2014.
Adjustments and amounts reflected within the unaudited pro forma condensed combined financial information related to the China International Operations are managements estimates based on available information. Accordingly, as described in Note 2 below, the unaudited pro forma condensed combined financial statements include preliminary allocations of the purchase price to reflect the estimated fair values of certain assets and liabilities acquired in connection with the consummation of the acquisition of the China International Operations.
The unaudited pro forma condensed combined financial information:
| do not purport to represent what the consolidated results of operations actually would have been if the acquisition of the China International Operations had occurred on January 1, 2014 or what those results will be for any future periods or what the consolidated balance sheet would have been if the acquisition had occurred on December 31, 2014 or what the consolidated balance sheet will be on any future date; and |
| have not been adjusted to reflect any matters not directly attributable to implementing the acquisition of the China International Operations. No adjustments, therefore, have been made for actions, such as any of GM Financials integration plans related to the China International Operations. In connection with the plan to integrate the China International Operations, GM Financial anticipates that non-recurring charges, such as costs associated with systems implementation and other costs related to exit or disposal activities, could be incurred. These charges could affect the results of operations of GM Financial in the period in which they are recorded. The unaudited pro forma condensed combined financial statements do not include the effects of the costs associated with any restructuring or integration activities resulting from the acquisition of the China International Operations, as they are non-recurring in nature and were not determinable at the time that the unaudited pro forma condensed combined financial statements were prepared. |
2
General Motors Financial Company, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of December 31, 2014
The following preliminary unaudited pro forma condensed combined balance sheet combines the historical balance sheets of the China International Operations and GM Financial on an acquisition accounting basis assuming that the acquisition of the China International Operations was completed on December 31, 2014.
(In millions) | GM Financial | International Operations, Reclassified (Note 4) |
Purchase Accounting and Other Adjustments |
Pro Forma Combined |
||||||||||||
Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 2,974 | $ | | $ | (922 | )A | $ | 2,049 | |||||||
(3 | )B | |||||||||||||||
Finance receivables, net |
33,000 | | | 33,000 | ||||||||||||
Leased vehicles, net |
7,060 | | | 7,060 | ||||||||||||
Restricted cash |
2,071 | | | 2,071 | ||||||||||||
Goodwill |
1,244 | | | 1,244 | ||||||||||||
Property and equipment, net |
172 | | | 172 | ||||||||||||
Investment in equity method investee |
| 634 | 415 | C | 918 | |||||||||||
(131 | )F | |||||||||||||||
Deferred income taxes |
341 | | | 341 | ||||||||||||
Related party receivables |
384 | | | 384 | ||||||||||||
Other assets |
478 | | | 478 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 47,724 | $ | 634 | $ | (641 | ) | $ | 47,717 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities and Shareholders Equity |
||||||||||||||||
Liabilities: |
||||||||||||||||
Secured debt |
$ | 25,214 | $ | | $ | | $ | 25,214 | ||||||||
Unsecured debt |
12,217 | | | 12,217 | ||||||||||||
Accounts payable and accrued expenses |
1,002 | | | 1,002 | ||||||||||||
Deferred income |
392 | | | 392 | ||||||||||||
Deferred income taxes |
20 | | | 20 | ||||||||||||
Taxes payable |
234 | | | 234 | ||||||||||||
Related party taxes payable |
636 | | | 636 | ||||||||||||
Related party payable |
433 | | | 636 | ||||||||||||
Other liabilities |
184 | | | 184 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
40,332 | | | 40,332 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Shareholders Equity: |
||||||||||||||||
Additional paid-in capital |
5,799 | 592 | (592 | )D | 5,799 | |||||||||||
Accumulated other comprehensive (loss) income |
(433 | ) | 42 | (42 | )E | (433 | ) | |||||||||
Retained earnings |
2,026 | (3 | )B | 2,019 | ||||||||||||
(4 | )F | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total shareholders equity |
7,392 | 634 | (641 | ) | 7,385 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and shareholders equity |
$ | 47,724 | $ | 634 | $ | (641 | ) | $ | 47,717 | |||||||
|
|
|
|
|
|
|
|
See accompanying notes to unaudited pro forma condensed combined financial information
3
General Motors Financial Company, Inc.
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 2014
The following preliminary unaudited pro forma condensed combined statement of income combines the historical statements of income of the International Operations and GM Financial on an acquisition accounting basis assuming that the Transactions were completed on January 1, 2014.
(In millions) | GM Financial | International Operations, Reclassified (Note 4) |
Purchase Accounting and Other Adjustments |
Pro Forma Combined |
||||||||||||
Revenue |
||||||||||||||||
Finance charge income |
$ | 3,475 | $ | | $ | $ | 3,475 | |||||||||
Leased vehicle income |
1,090 | | | 1,090 | ||||||||||||
Other income |
289 | | 289 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,854 | | | 4,854 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Costs and expenses |
||||||||||||||||
Salaries and benefits |
614 | | | 614 | ||||||||||||
Other operating expenses |
548 | 4 | 552 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
1,162 | 4 | | 1,166 | ||||||||||||
Leased vehicle expenses |
847 | | | 847 | ||||||||||||
Provision for loan losses |
604 | | | 604 | ||||||||||||
Interest expense |
1,426 | | 1,426 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,039 | 4 | | 4,043 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Equity income |
| 122 | (15 | )F | 107 | |||||||||||
Income before income taxes |
815 | 118 | (15 | ) | 918 | |||||||||||
Income tax provision |
278 | | 278 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 537 | $ | 118 | $ | (15 | ) | $ | 640 | |||||||
|
|
|
|
|
|
|
|
See accompanying notes to unaudited pro forma condensed combined financial information
4
General Motors Financial Company, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
For the Period Ended December 31, 2014
Note 1Preliminary Purchase Accounting Allocation for the China International Operations
The unaudited pro forma condensed combined financial information includes the unaudited pro forma condensed combined balance sheet as of December 31, 2014, assuming the acquisition of the China International Operations occurred on December 31, 2014 on an acquisition accounting basis. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2014 assumes that the acquisition occurred on January 1, 2014 on an acquisition accounting basis.
The investment in the China International Operations is being accounted for as an equity method investment; accordingly, GM Financials cost to acquire the China International Operations will be allocated to the assets, including identifiable intangible assets, and liabilities of the China International Operations at their respective estimated fair values at the acquisition date. Any remaining basis difference will be recognized as equity method goodwill.
Note 2Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information related to the acquisition of the China International Operations is included as of and for the year ended December 31, 2014. The acquisition is being accounted for under the purchase method of accounting in accordance with Accounting Standards Codification 805, Business Combinations.
The unaudited pro forma condensed combined financial information as of and for the year ended December 31, 2014 includes preliminary estimated adjustments to record the equity interest in SAIC-GMAC at its estimated value and represents managements estimates based on available information.
5
Certain amounts in the historical consolidated financial statements of the International Operations have been reclassified to conform to GM Financials classification; refer to Note 4 Reclassification Adjustments for further information.
The unaudited pro forma condensed combined financial information is presented in accordance with the Securities Exchange Act of 1934, as amended, for illustrative purposes only and does not indicate the results of operations or the combined financial position that would have resulted had the acquisition of the China International Operations been completed at the beginning for the applicable period presented, nor the impact of possible business model changes as a result of current market conditions which would impact revenues, performance of finance receivables, expense efficiencies, asset dispositions, and other factors.
Additionally, the unaudited pro forma condensed combined financial information is not indicative of the results of operations in future periods or the future financial position of the combined businesses.
Note 3Purchase Accounting and Acquisition Adjustment Descriptions
(A) | Adjustments to reflect the estimated cash payment of $1.0 billion to acquire the China International Operations as of December 31, 2014 and cash received from SAIC FC for the 5% equity interest in the China International Operations |
(Dollars in millions) | Amount | |||
Amount paid to Ally for the China International Operations at closing |
$ | 1,049 | ||
Less: Amount to be received from SAIC FC for the sale of 5% interest in the China International Operations |
(127 | ) | ||
|
|
|||
Net decrease to cash and cash equivalents |
$ | 922 | ||
|
|
(B) | Adjustment to reflect the payment of incremental transaction costs expected to be incurred in connection with the acquisition of the International Operations. |
(C) | Adjustment totaling approximately $415 million to record the non-controlling equity investment in SAIC-GMAC at its acquired value as of December 31, 2014. This adjustment does not affect the income earned in connection with the equity interest for the year ended December 31, 2014 as the premium paid was allocated to equity method goodwill. |
(D) | Adjustment to eliminate the China International Operations historical net parent investment. |
(E) | Adjustment to eliminate the carrying value of the China International Operations accumulated other comprehensive income. |
6
(F) | Adjustments to record the sale of 5% equity interest in SAIC-GMAC to SAIC FC for a purchase price of RMB 775 million (approximately $127 million), net of $4 million acquisition discount. Adjustments to the unaudited pro forma condensed combined statement of income reflect the sale of this 5% for the entire applicable period. |
7
Note 4Reclassification Adjustments
Unaudited Pro Forma Condensed Combined Balance Sheet: International Operations Reporting Reclassification Adjustments
As of December 31, 2014
(In millions) | GM Financial |
International Operations |
Reporting Reclassification Adjustments |
International Operations Reclassified |
||||||||||||
Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 2,974 | $ | | $ | | $ | | ||||||||
Finance receivables, net |
33,000 | | | | ||||||||||||
Leased vehicles, net |
7,060 | | | | ||||||||||||
Restricted cash |
2,071 | | | | ||||||||||||
Goodwill |
1,244 | | | | ||||||||||||
Property and equipment, net |
172 | | | | ||||||||||||
Investment in equity method investee |
634 | | 634 | |||||||||||||
Deferred income taxes |
341 | | | | ||||||||||||
Related party receivables |
384 | | | | ||||||||||||
Other assets |
478 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 47,724 | $ | 634 | $ | | $ | 634 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities and Shareholders Equity |
||||||||||||||||
Liabilities: |
||||||||||||||||
Secured debt |
$ | 25,214 | $ | | $ | | $ | | ||||||||
Unsecured debt |
12,217 | | | | ||||||||||||
Accounts payable and accrued expenses |
1,002 | | | | ||||||||||||
Deferred income |
392 | | | | ||||||||||||
Deferred income taxes |
20 | | | | ||||||||||||
Taxes payable |
234 | | | | ||||||||||||
Related party taxes payable |
636 | | | | ||||||||||||
Related party payables |
433 | | | | ||||||||||||
Other liabilities |
184 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
40,332 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Shareholders equity |
||||||||||||||||
Parents net investment |
| 592 | (592 | )(1) | | |||||||||||
Additional paid-in capital |
5,799 | | 592 | (1) | 592 | |||||||||||
Accumulated other comprehensive (loss) income |
(433 | ) | 42 | | 42 | |||||||||||
Retained earnings |
2,026 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total shareholders equity |
7,392 | 634 | | 634 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and shareholders equity |
$ | 47,724 | $ | 634 | $ | | $ | 634 | ||||||||
|
|
|
|
|
|
|
|
Balance SheetInternational Operations Reclassification Adjustment Descriptions:
The following reclassification has been made to the International Operations financial statements in order to conform to the GM Financial presentation:
(1) | Adjustments to reclassify International Operations parents net investment category to additional paid-in capital. |
8
For the Year Ended December 31, 2014
(In millions) | GM Financial |
International Operations |
Reporting Reclassification Adjustments |
International Operations Reclassified |
||||||||||||
Revenue |
||||||||||||||||
Finance charge income |
$ | 3,475 | $ | | $ | | $ | | ||||||||
Leased vehicle income |
1,090 | | | | ||||||||||||
Other income |
289 | | | | ||||||||||||
Other financing revenue and interest income |
| | | | ||||||||||||
Interest expense on short-term borrowings |
| | | | ||||||||||||
Interest expense on long-term borrowings |
| | | | ||||||||||||
Depreciation expense on operating lease assets |
| | | | ||||||||||||
Income in equity method investee |
| 122 | (122 | )(1) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,854 | 122 | (122 | ) | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Costs and expenses |
||||||||||||||||
Salaries and benefits |
614 | | | | ||||||||||||
Operating expenses |
548 | 4 | | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
1,162 | 4 | | 4 | ||||||||||||
Leased vehicle expenses |
847 | | | | ||||||||||||
Provision for loan losses |
604 | | | | ||||||||||||
Interest expense |
1,426 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
4,039 | 4 | | 4 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Equity income |
| | 122 | (1) | 122 | |||||||||||
Income before income taxes |
815 | 118 | | 118 | ||||||||||||
Income tax provision |
278 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 537 | $ | 118 | $ | | $ | 118 | ||||||||
|
|
|
|
|
|
|
|
Income StatementInternational Operations Reclassification Adjustment Descriptions:
The following reclassifications have been made to the International Operations financial statements in order to conform to the GM Financial presentation:
(1) | Adjustments to reclassify International Operations equity method investee income, net of tax. |
9